Tour operators decry move to hike tax

Hyderabad: "Tourism sector will be promoted on mission mode. Focus will be on developing 50 destinations across India," said Union Finance Minister Nirmala Seetharaman on Wednesday. This has made tour operators jittery.

Nirmala said the government would provide information on physical connectivity, virtual connectivity, tourist guides, food streets and tourist security and other relevant aspects of the visitor experience regarding the selected 50 destinations through an app.

Tour operators say that while all that was a welcome step, the increase of Tax collection at Source (TCS) from 5 percent to 20 percent on overseas tour packages, causes serious concern. They feel that the government, while trying to encourage domestic tourism particularly in view of the expected largescale visitors from across the seas as it would be hosting G20 conferences, should not forget the interests of the tour operators who depend on international tours. The decision to hike the TCS would result in the loss of crores of rupees, they said.

Talking to Hans India, travel agents said the increase in the TCS would mean that a traveller to a nearby place, say Singapore, who used to pay Rs 1 lakh per person till now would have to pay additional Rs 20,000. Travel Agents Association of India's Nagesh Pampati said Parliament should debate the issue and corrective measures should be taken.

The tourism and hospitality industry had suffered badly for two years due to Covid-19. He said this is one sector which despite being a major employment generating area and one of the major contributors to the GDP has not been given the status of industry. They had expected this from the government, but it added tax burden. He said the association would submit a memorandum to the Central government seeking withdrawal of the TCS.

A tour operator M Vikram, who deals in holiday packages, said the Central government's initiatives like Swadesh Darshan and circuit tourism packages, etc, are welcome but while encouraging domestic tourism, it should not kill international tours.